Friday, September 2, 2011

CIMB Research has Technical Buy on Eng Kah

KUALA LUMPUR: CIMB Research has a Technical Buy on Eng Kah Corporation at RM2.98 at which it is trading at a price-to-book value of 2.3 times.

The research house said on Friday, Sept 2 the recent correction dragged prices towards its 200-day SMA.

It said since then, the bulls have made a comeback. On Monday, the candle broke out of its triangle resistance, and this could be seen as a prelude to more upside ahead.

CIMB Research said buying momentum should pick up once the 30-day and 50-day SMAs at RM3.01-RM3.06 is taken out.

'MACD has staged a positive crossover. RSI too has hooked upward. Hence, we have reasons to believe that the rebound is not over yet. The next upleg should lift prices towards RM3.16 and RM3.41 next.

'Aggressive traders may start to buy now while others should wait for a push above RM3.06. Put a stop at below RM2.80,' it said.

Eng Kah manufactures perfumes, cosmetics, skin care, toiletry and household products.

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